Renewable energy target: Labor and the government agree to a number but sticking points remain

A deal to save Australia's wind and solar industry could be scuppered by last minute demands by the Abbott government, despite it making headway with the opposition on an agreement to reduce the renewable energy target.

The government and Labor emerged from talks in Melbourne on Friday to say they had the basis for an agreement to cut the target from 41,000 gigawatt hours of annual renewable energy production by 2020 to 33,000 gigawatt hours.

But an eleventh hour move by the government to include the burning of native timber in the scheme and retain two-yearly reviews of the target threatens an agreement after an outcry from the clean energy industry on Friday afternoon.

Fairfax Media understands that the push to retain regular reviews of the scheme came from Industry Minister Ian Macfarlane.

Labor's environment spokesman Mark Butler, who earlier in the day appeared optimistic about ending the deadlock, said in a statement late on Friday "it's clear Tony Abbott is still not serious about fixing the mess he created for Australia's renewable energy industry".

He said the government was focusing on "sideline issues such as wood waste" and was reneging on its previous position that reviews of the target every two years would cease.

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"Unfortunately, this will ensure that the very uncertainty that has plagued the sector under Tony Abbott is set to continue."

The government's proposal for the renewable energy scheme will have to be signed off by both cabinet, and Labor's shadow cabinet and caucus next week if it is to be passed.

"We have the basis to proceed and so my hope and expectation is that the renewable energy target issue will be resolved precisely as we said prior to the election," Environment Minister Greg Hunt told Friday's media conference in Melbourne.

Mr Macfarlane said he was confident that "one way or another" the government would pass the plan to include native woodchip burning through the Parliament, even if it meant turning to the crossbench.

"We will be relying on the Labor Party's support to carry the bulk of the legislative amendments which will include the 33,000 gigawatt hour target, but we would expect that the crossbench would support us on wood waste," he said.

The Clean Energy Council said a "welcome end" could be in sight if the two parties could agree, and the sector would "reluctantly accept" a target of 33,000.

But chief executive Kane Thornton said the industry did not want a messy debate on the floor of Parliament that would prolong industry uncertainty even further.

The Climate Institute joined the criticism of the retention of two-yearly reviews and said the compromise was "at best a Band-Aid".

Australian Solar Council chief executive John Grimes said: "They've just announced that the next review will start in seven months time."

"This is the most cynical political ploy and shows what the government's real intentions are."

Following a furious reaction from industry about the two-yearly reviews, a government source said a coalition of backbenchers was discussing it with the sector.

The Coalition and Labor have been deadlocked since the government last year launched its Warburton review of the bipartisan renewable energy target, which had been set at 41,000 gigawatt hours by 2020.

The government's first offer was a so-called "true 20 per cent" figure of about 26,000 gigawatt hours, while Labor called for a number in the mid to high-thirty thousands.

Last month, renewables peak body the Clean Energy Council put forward a compromise figure of 33,500 gigawatt hours which Labor said it would accept, but it was rejected by the government.

Investment in renewable energy in Australia dived by 88 per cent in 2014 after the government launched its review of the target.